It has been a bumpy start to the year for the soft-fruit category, with growers battling against the weather in some of the major supply sources, suppliers struggling to secure higher prices and consumers failing to put berries in their shopping baskets.
Across the four main sub-categories, suppliers have had to work hard to get to grips with supply and demand in the face of one of the coldest winters that the UK has experienced for a long time.
At the same time, high winds and heavy rain in the likes of Spain and Morocco have hit quality and yields.
However, the months of January and February are traditionally slower moving than most for the berry category and the industry is looking forward to the first signs of spring, when supply and demand is expected to get back on track.
The strawberry sub-category, in particular, saw plentiful supply at the beginning of the year meet lacklustre demand in the aftermath of the Christmas and New Year festivities and the freezing conditions that followed.
This set-up continued, but the situation shifted when the main Spanish production area of Huelva was hit by the effects of high winds and heavy rainfall, which delayed the start of the export season and resulted in some crop losses.
“Growers have probably lost about 40 per cent of their fruit from first flowering,” an insider in Spain told FPJ last month. “Obviously, some areas within Huelva have been hit harder than others and it is the low-lying production zones that have had the worst of it. But there are still another four and a half months of the season for the situation to recover.”
Supplies eventually tightened up in the first week of February, but insiders insist that trade has remained tough and the sales slowdown has so far shown no signs of a recovery.
These issues have been reflected in the raspberry category, where the fruit achieved low prices before the initially high volumes from Spain and Morocco took a tumble.
“Volumes have gone down so prices have been up since the festive period; the supplies just weren’t there,” says a source. “Yields have been lower since bad weather hit in Spain and Morocco.”
However, some of the major berry sub-categories have fared better than others and demand for blueberries - long held up as a big opportunity for the trade - has grown year on year. But it has not been a clear road for producers, with those in Chile and Argentina coming up against rain and cool temperatures.
“In some cases, growers have struggled to get the fruit sizes they need given the conditions,” says one supplier. “The overall volumes have decreased, but this has meant that there has been a more even spread of fruit this year.
“In general, the returns back to growers have been higher this year. There has been less fruit on the market and promotions have finished earlier. But shoppers want to buy blueberries and there has been continued emphasis on how healthy they are, which has helped to boost sales.”
Blackberries have enjoyed steady demand, with Mexico remaining the main source for the UK but production now taking a dip, which is normal at this time of year.
“The next few weeks should be interesting,” says a supplier. “Strawberry production will increase; Morocco will start to see volumes increase, but we will lose Egypt at some point.
“Some retailers are starting strong promotions, but there is not enough fruit in the marketplace and it won’t be there until March. The market is going to be quite tight over the next few weeks.
“But the weather is getting better, the days are getting longer and slowly but surely, demand for berries will increase. The main thing for us now is to look ahead because the poor weather in the main production areas could still have an effect later on. Even in the UK, some of the everbearers have frost damage, so only time will tell how this will play out in the next few months.”
SOUTH AFRICAN BERRIES INCREASE UK PRESENCE
The soft-fruit offer from South Africa has developed substantially over the past 10 years and for now, consists mostly of blueberries and raspberries. The growing demand for counter-season supply and improvements in the cold chain has encouraged a considerable expansion of production and exports to the UK during this period. Louise Brodie reports from South Africa.
One of the main challenges to production in South Africa is the lack of winter chill units that are required for berry production and, as a result, most of the production is located in the Western and Southern Capes and high in the mountains. As berry plants evolved on the forest floor in cool climates, the South African climate means that some varieties need to be to grown under shade netting or in tunnels to protect them from the sun and wind.
However, berry production in the southern hemisphere is growing and South African players are making the most of their offer.
The winter growth for berry consumption in the UK provided the impetus for the establishment of much of the blueberry production in South Africa. The largest blueberry production initiative resulted from a joint venture between founder of UK-based Winterwood Farms Stephen Taylor and Trevor McKenzie, managing director of Eurafruit South Africa, the country’s largest berry export company. In co-operation with a number of partners, they have established berry production units in South Africa, both on properties owned by their joint venture and with selected production partners.
“Initially, we imported plant materialfrom the US and the UK, and contracted growers to plant them,” explains McKenzie. “Today, we hold the South African licence for a number of international blueberry breeding programmes and our producers are contracted to grow for our markets, both locally and abroad. All of our exports to the UK are sent to Winterwood Farms for packing and distribution, and are marketed into the UK multiples through BerryWorld.”
Taylor maintains that counter-season production was needed to ensure the continuity of supply. “Establishing berry production requires considerable capital investment and we undertook a long-term analysis of the supply chain and costing when considering this option,” he says. “This process showed that South African supply would be more competitive than product from Argentina. Our decision to invest in South African production also grew from our established partnership with Eurafruit. South African production is currently supplying high-quality berries and as the supply chain is shorter than from South America, the condition of this fruit is also better than South American fruit when it arrives in the marketplace.”
McKenzie confirms that the main focus is on blueberries, but that the joint venture also produces smaller quantities of raspberries, blackberries and redcurrants and a range of other fruit for the South African domestic market. “We have approximately 275 hectares planted and more than half of our plantings are less than three years old,” he says. “Our planting expansion is cautiously market driven as we would like to avoid producing more than our current markets can sell profitably.”
The South African blueberry harvest season is from September to February. The production is mostly Southern Highbush, which ripens before Christmas. All exports are fresh - not frozen or processed - and during the 2009-10 production season, the operation exported 550 tonnes. As much of the joint venture’s young plantings will begin production during the forthcoming harvest, volumes are expected to increase to close to 1,000t. Recent expansion has also included organic production and during the next two to three years, Winterwood Farms will receive increasing volumes of organically produced blueberries from South Africa to fill this discerning market need.
“During the early part of the season, we export by air and as the season progresses and the prices drop, we switch to seafreight. At the moment, about half of our volumes are exported by air and half by sea, but as our production increases we are likely to send larger volumes by sea,” says McKenzie. “The impact of the economic downturn on blueberry sales has been limited as we are involved in a market sector that is still growing and has been helped by all the health benefits that blueberries offer.We have been able to increaseproduction andmarket share over the past two years and our focus on quality and service delivery is paying dividends. At present, we only export to the UK but as production increases, we will be concentrating on expanding to other markets.”
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